Issue no 155
You don’t get to hear much about Lesotho but it has an interesting story to tell. The good news? It has recently sold off 70% of its incumbent telco to a consortium that includes Econet and South Africa’s Eskom. The bad news? The price has been a five year exclusivity agreement. The silver lining? An agreement with the regulator that encompasses roll-out targets. It has also opened up international connectivity through VSAT licences and a competitor to the incumbent. Russell Southwood spoke to T Khabele, Chief Executive of the Lesotho Telecommunications Authority about what’s happening and future plans.
What’s the current position of the incumbent?
Telecom Lesotho has already been broken down. A 70% shareholding has been bought by a consortium of three companies: Mauritius Telecom; Econet International and Eskom Enterprises). 30% is still held by the Government. The plan is to sell this remaining shareholding to Lesotho nationals at a later date. No timescale has yet been set for the this sell-off.
Lesotho Telecom has been given exclusivity for five years and that period ends in February 2006. The exclusivity covers voice, data and leased lines nationally.
It was also has been given an option to apply for a cellular licence and they’ve done that through Econet.
Some obligations go with the exclusivity. It has to provide over a five year period an additional 150,000 subscribers all over the country. A certain percentage - twenty-five percent - have to be rural.
Are there other cellular operators?
Vodacom Lesotho. It was a joint venture between Vodacom and Lesotho Telecom but was sold when the latter was itself sold.
What sort of subscriber levels have they got?
Econet started up in June 2002 and has 24,000 subscribers, of which 18,000 are active. In other words they’ve made a call in last year. Vodacom Lesotho has 101,000 subscribers, of which 78,000 are active.
How many ISPs are there?
Three. Leo, Squareone and Adelfa. Between them they have a total of 1,500 subscribers.
Are you running a Universal Service Access Fund?
We have decided that our strategy for the next three years from April this year will not be to establish a Fund but to discuss with the network operators what their annual obligation in terms of roll-out will be. So for example, we will discuss with the cellular operators how many base stations they will roll-out this year.
Is there a monopoly on international connectivity?
At the moment we give VSAT licences to international organisations like the UN, embassies and the multinationals. We have also licensed Bethlehem Technologies Lesotho who will trade as Oscar Telecoms to offer broadband and international broadcast in the country and the licence allows them to connect internationally. It’s a second point of international connection, giving competition. And it’s completely independent.
Who’s it owned by?
A consortium with companies (including New Skies) from South Africa and Lesotho.
What will be the biggest challenges for the regulator over the next five years?
The first challenge is expanding internet provision, particularly to the 12 or so towns outside the capital Maseru. To achieve this we need to make sure the network reaches every place with the capacity to connect to the internet.
The second big challenge is to ensure that ICT services generally - including multimedia and broadcast - are available. We need to address the full range of e-readiness issues and start providing e-services.
Big Change’s Arthur Goldstuck examines the business case for location-based services and finds it wanting.
In real estate, you will have heard, there are only three rules: location, location and location.
In the emerging industry of mobile commerce, we hear the same argument. Much is made of the potential of location-based services (or LBS, in its inevitable acronymisation). The most profitable models for the delivery of mobile commerce services, say the experts, will be based on where users find themselves. Ergo, the most successful services should be the likes of:
Traveller services: the business traveller wanting information on the destination where they’ve just arrived;
Entertainment information: users going out to movies or a meal wanting information on what is in the area where they find themselves;
Route information: directions on getting where you want to go from where you are;
Emergency services: alerting rescue, medical or police services on the location of someone in distress.
Aside from the last, which is more usually the province of public authorities rather than of commercial services, the problem with this vision is that it doesn’t make sense. Oh yes, it makes perfect sense from a technological perspective. This is what the technology can do, so why shouldn’t it be part of the promise?
Even academics are arguing that mobile commerce is dependent on location on the one hand, and on time on the other. In short, where users are, and when they are there.
But it is wrong, wrong, wrong.
If the mobile phone or data device is about anything, it is about mobility. It is about being unwired. It is about being untethered. In other words, it is about NOT being tied to location.
The other half of the equation, time, is far more relevant, yet far less often acknowledged. Take sports results, one of the more popular forms of information accessed from mobile devices. It is irrelevant where the user is at the time of seeking the result. Of critical importance, however, is when the user wants those results. If they aren't available from one provider immediately after the end of an event, the user will try the next provider. If the user is relying on a subscription service, and it does not deliver on-time results, the user will abandon the service in favour of one that is more time-conscious.
Same applies to share prices and exchange rates, ring tones and mobile graphics, short message services and e-mail access. These are among the most common applications of mobile commerce, and none of them relate specifically to the immediate location of the user.
Location, in fact, is only important in this context from the point of view of access itself. Whether and where the user can access the network. Again, this assumes that emergency services are part of public rather than commercial service.
Why the obsession with LBS then? It is a result of focusing on the capabilities of the device rather than the needs of the user of the device. This was one of the basic reasons for the dot.com collapse, which was in many cases a consequence of enthusiasm for the technological potential of the Internet, rather than its real, practical and everyday benefits.
In the unwired world, the focus has turned once more to technological potential, rather than to practical reality. The consequence of this is that the agenda for mobile communications is set by the technicians who are focused on technical detail, and who superimpose a technical view on the usage of the technology. Déjà vu, anybody?
Here is the news, for the overly technically focused:
Location-based services were not invented by the mobile industry. Even local newspapers represent a form of location-based service. LBS tries to reinvent what already works well.
Users don’t stumble about with their eyes glued to their mobile phone screens, trying to figure out where they are, wondering what movie is showing across the road, or choosing from all the special 25 percent discount offer sent unsolicited to their phone from the stores they are passing.
In most cases, users don’t need their mobile devices to tell them what they are seeing before their eyes. Users tend to use their mobile devices to make contact with people who are not at the same location. Users access information that is usually not directly related to where they are, but rather to what they want to know, irrespective of where they are.
Of course, there is a form of LBS that is hugely profitable, but it’s not what the technicians had in mind for their acronym. It,s called voice, and it is often used by people wanting to inform others of where they are, or to find out where others are. This does not, of course, need the mediation of service providers other than the standard, built-in role of the networks themselves. And that is bad news for anyone who bases a business model on selling LBS on top of existing network services.
They are doing nothing less than selling something no one needs to buy.
The Nigeria government has approved the payment of US$2million mobilization fee to Pentascope international, the Dutch consulting firm engaged recently to manage the Nigerian Telecommunications Limited (NITEL) on contract for three years. Nasir el-Rufai, Director General of the Bureau of Public Enterprises (BPE) in a memo, stated that the US$2 million is in respect of clearly verifiable expenses like cars, houses and salaries and other personnel costs.
The BPE boss said the remuneration could could be higher if the Dutch firm meets the turnover and profitability targets. The management contract for NITEL which was signed by the parties on March 18, is to take effect from April 1, 2003.
Media in Nigeria
Orascom Telecom Algeria launched its service in February 2002 and managed to command 70% of the market after less than 10 months of operations. Algérie Télécom, the government owned incumbent, is undertaking major new projects to remain in the competitive game. The competition, along with further liberalization plans in the market, present exciting new opportunities for telecom equipment vendors.
The Algerian telecommunication law of August 2000 set the rules for enabling competition in the sector, and created a regulatory authority in charge of regulating the telecom sector. The start of duopoly competition in the GSM segment has managed to lift the country’s 2002 GSM penetration rate to close to 400% of its 2001 levels where the market added 330,000 new subscribers in 2002. This is more than 14 times the number of subscribers added in 2001 when the market was still a monopoly market.
The liberalization process is set for acceleration. Algeria’s government plans to introduce a license for a fixed services operator in rural areas and another license for an international and country long distance operator in 2004. Moreover, two VSAT licenses were awarded this month.
"The fixed line network continues to have a low penetration rate, which reached 6.18% by end of 2002. The PSTN service, however, has been the highest revenue generating service for Algérie Télécom, and constituted 73.81% of the total telecommunication revenues in 2001. This trend is set to change as the GSM market continues its rapid growth." Arab Advisors Group’s analyst, Serene Zawaydeh, wrote in the report. "The Arab Advisors Group expects the mobile subscribers to increase rapidly as the effects of duopoly, and then full competition in 2004, "kick in". The Arab Advisors Group projects the number of mobile subscribers to exceed 10 million in 2007, almost double the number of the PSTN subscribers that year. Revenues from mobile operations are expected to reach US$ 2.376 billion in 2007, while the PSTN revenues are expected to grow to US$ 577.500 million in the same year." Ms. Zawaydeh added.
SITEL, a joint venture between Ericsson Sweden and Algerian companies, supplies the bulk of the fixed line network in Algeria. As for Algérie Télécom’s mobile network, it has also been installed by Ericsson, which was also awarded a contract in February 2003, to expand the mobile network by at least 500,000 lines. Clearly, Ericsson has a very strong position in the Algerian market.
- Burkina Faso’s Privatisation Commission is seeking expressions of interest from strategic investors and consortia led by a qualified strategic investor for the partial privatisation of ONATEL. Expressions of interest will be submitted by 14 May 2003. Shortlisted parties will know by 19 May and the completion of the sale (with immediate devolution of the management will take place in October 2003. The initial stake sold will be 34%, followed by a further 10% in 2007 and a final 7% by 2009.
- A recent investment supplement from Ghana in the New York Times casts new light on the Ghana Telecom saga. According to Dickson Oduro-Nyaning, Deputy Chief Executive of the company it is highly regarded by the people of Ghana. (Probably news to the people of Ghana). Also he says there is "a great pressure on funding major capital investment programmes" and seems to be pitching for investors in its mobile operation, One Touch.
- Mauritian mobile operators Emtel and Cellplus have lowered their rates and made it possible to exchange SMS across networks following a new tariff structure announced by the regulator, ICTA. Reductions are between 44-73%.
- Chairman of Telecom Egypt - TE, Akeel Bisheer, has confirmed confirmed ongoing negotiations with Egyptian Company for Mobile Services – ECMS (EMOB.CA) and Vodafone Egypt, through which TE is to abandon current plans to launch Egypt’s third GSM network. Accordingly, ECMS and Vodafone Egypt’s exclusivity period is to be ex- tended for a further 4 years ending FY07, in return for a sum of LE2 billion to be jointly paid by the existing players to TE. The negotiations come following Telecom Egypt.s failure to find an, international, strategic partner to operate the third GSM network.
- Belgium’s Zenitel has won a contract to deliver a Coastal Radio Communication system in Algeria. The €2.4 million deal includes the delivery and installation of Coastal Radio Communication and Navigation Control equipment in Algeria, and will be completed in the first quarter of 2004. The new contract in Algeria with the Ministry of Posts & Telecommunications of Algiers concerns Coastal Radio Communication and Navigation Control equipment along the 1,200 kilometer Algerian coastline. Zenitel will deliver a MF Broadcasting System for radio NAVTEX messages.
The country’s fledging Internet sub-sector, particularly the last mile point of delivering service to end users via cybercafe, may have improved considerably in the last two years, but there is still no cause for cheer, according to a new status report on the Internet industry by ICT Watch Nigeria, a non governmental organisation based in Lagos.
There are about 852 active cybercafes in the country with Lagos leading with 341 cafes followed by Oyo (Ibadan) with 78 cafes and Port Harcourt (Rivers) with 32 cafes. Of this figure, only 127 cafes are connected to the Net via Very Small Aperture Terminals (VSATs). The implication is that of all the active cafes, which are less than 1000 in all, only a 127, or less than 25 pee cent can actually guarantee uninterrupted access to the Internet backbone.
To address this problem and push up access to the Net particularly in rural areas, suburban centres and other largely under-served communities, ICT Watch had last year launched the Nigeria Internet Project (NIP).
" We want to increase the number of cafes in the country and improve on the number of people that have access to the information superhighway at a cost-effective manner. We want to demonstrate that you do not have to spend a fortune to set up and operate a self-serving Internet cafe.
"We also want to re-direct the focus of organisations and individuals with the wherewithal to invest in opening knowledge windows to less privilege Nigerians and at the same time create job opportunities," said Lai Omotola, national co-ordinator of NIP.
Parts of the objectives of the NIP include to provide Internet access in all the 36 states including Abuja, to help inculcate a positively enhancing Net culture for the dissemination, sharing of knowledge and to ultimately foster a sustainable platform for e-commerce.
"Our method is simple. We encourage wealthy individuals, organisations and donor agencies to establish funds to set up Internet cafes at any locations in the country," said Omotola.
UUNET Zambia has launched the first hubbed international gateway in the sub- Saharan Africa which would substantially ease congestion on the network. The company’s Africa director Henry Njoroge announced in Lusaka that the international gateway launched on April 24, allowed for UUNET connections to the MCI global network. Mr Njoroge said the international gateway would further allow for integration into the UUNET network operations centre providing online monitoring, configuration and support. It would also facilitate for computerised incident management systems.
UUNET Zambia is a UUNET South Africa and Africa Online joint venture company providing corporate network services.
Times of Zambia
As part of efforts to enable the Nigerian Postal Service (NIPOST) take advantage of global changes in communication, the Nigerian government has approved the establishment of a joint venture between NIPOST and two private firms Development Venture International Incorporated (DVI) of USA and ABG Nigeria Limited. Tagged NETPOST Nigeria Limited, the venture is expected to facilitate the delivery of electronic mail and other related services in Nigeria. The project which is billed to take off in thirteen centers across the country will use VSAT technology. Each of the partners is expected to contribute an initial share capital of N100 million at a ratio of 40 percent from NIPOST, 35 percent from DVI and ABG 25 percent.
Media in Nigeria
- Faced with threat of possible eclipse of their businesses, internet service providers in Nigeria under the aegis of the Internet Service Providers Association of Nigeria (ISPAN) have called on the Nigerian Communications Commission (NCC) to reconsider its plan to scrap the 2.4 Ghz and 5.8 GHz frequency currently used by most internet service providers. The NCC has given up till the end of this year when it would expect every body using the ISM (Industrial, Scientific and Medical) band for unlicensed commercial operation to vacate.
- In what signals the construction of Nigeria’s biggest Internet network, Nigeria’s pioneer wireless telecoms operator, MTS First Wireless, last week in Lagos entered into a supply and equipment deployment contract worth N3 billion for Internet, VSAT, and Remote Stations equipment for its nationwide integrated voice and data telephony services. Bacom Communications Ltd, which entered the contract agreement with MTS First Wireless, would build the integrated voice and data network capable of supporting up to one million Internet Service users across the country.
The Information Technology (IT) industry in Botswana is a money-spinner. The government has put in place fine policies and the number of citizen owned businesses registered with the Public Procurement and Asset Disposal Board (PPADB) has increased tremendously.
At the moment, there are 68 wholly citizen owned companies; four majority citizen owned ones; and three in which citizens have minority ownership. But they have only harnessed about two percent of the market in the last three years.
And with this stark reality both government and citizen owned businesses in the industry have begun pointing fingers at each other with accusations and counter-accusation flying thick and fast.
Citizen owned businesses in the IT industry blame government saying it is not empowering them. The government says citizens have themselves to blame. After all, it has put in place enabling policies but the citizens are not taking advantage to empower themselves.
Last week, acting manager of the Government Computer Bureau, Alicia Ramaribana said they have put in place enabling policies and it was up to citizen businesses in the industry to take advantage of them. She was speaking at a forum dubbed "Is Botswana Ready to Empower its Citizens in the IT Industry’ organised by the Citizen Owned Businesses in Information Technology (COBIT). She said the stage for empowering citizens in the IT business was first set in 1999 at the National Conference on Citizen Empowerment. This was followed by the IT Towards 2016 conference.
Further, Ramaribana said, government held more consultations and came up with the Price Preference and Reservations Policy and the PPADB Act, which led to the formation of PPADB.
Moreover, government has also put up empowerment policies such as FAP, SMME, CEDA and others, a clear sign of a ‘policy movement in a relatively short time and they speak for themselves.’
"And because the policy framework is in place, the question is not whether Botswana is ready to empower its citizens in IT but rather what action, innovation and initiative can bring about the desired outcome to further enhance the role of citizens in the ICT industry," she said.
Ramaribana stated that government is doing well in economic empowerment as well as in implementing the Reservation and Price Preference policy. "But many of the 68 companies are a one man show with no particular expertise in IT but just box-pushers," she said.
She suggested that citizen companies should look at new ideas and at raising standards in order to turn the tide around. She regretted that the Botswana IT Society is no longer active.
Further, she noted that the industry continues to be plagued by divisiveness, factions, self-interest and lack of public spiritedness.
But Ike Abdulla of Hi-Performance Systems said if government fails to translate its policies into practice, everything would continue to fail. He castigated citizen businesses for expecting handouts from government as happens in agriculture and other sectors.
He challenged citizen businesses to gear themselves up and warned that "if you do not prepare yourself how do you expect to win a tender and even if you win and you are not prepared you will fail."
He emphasised that there is abundance of skills in IT in Botswana but regretted the lack experience, which will only be gained if citizen businesses are given work by government as the main consumer of IT services.
He said citizen businesses should do a self-introspection to see whether they have their financial affairs in order and whether they satisfy their customers.
"The only way you are going to improve is if you work at this issues. We need a change of attitude from government and business," he said.
In his assessment, the coming of empowerment has led to citizen business going down. He called this dis-empowerment.
Other stakeholders challenged government to do more saying that as the biggest consumer of about 80 percent of IT services, it has to provide the stimulus ‘and Batswana would avail themselves to deliver.’
They complained that when PPADB gives them jobs, it takes ages to get things rolling. PPADB was also accused of frequently changing specifications, which make life difficult for small companies.
David Kepaletswe of COBIT complained that there are no benchmarks to measure progress.
Faritec last week launched FariMed, an Application Service Provider (ASP) medical scheme administration and management health care system offering. FariMed delivers access to systems and applications in a manner that allows medical aid administrators to eliminate the costs and time associated with installing, managing and supporting these applications and systems.
FariMed also announced its first major contract with a value projected to be in excess of R40 million over a five-year term, with Ingwe HPO, the healthcare administration and open scheme business of African Life Assurance. Ingwe HPO provides medical aid administration to over 35,000 families through the Ingwe and Commed medical schemes. This contract with Farimed will enable Ingwe to prepare for expected growth in the emerging market through the provision of capitation-based products.
"The healthcare industry is one that is continually focused on from a cost perspective. Medical scheme administration, while being a relatively small portion of the total healthcare spend, is one that can be significantly impacted on through the application of technology," said Peter Botha Managing Director of Ingwe HPO. "Our agreement with FariMed allows us to realise savings of at least 30% in our IT costs alone, which will enable us to add value through better services to our scheme members."
- Packaging group Nampak has awarded Comparex Africa a three-year outsourcing contract worth R70 million.
- The Communications Authority of Zambia is lobbying the Government to extend a tax exemption to information and communication technology (ICT) products to woo more investment in the sector. Acting assistant controller Nicholas Mulusa said there was need to encourage people to bring in more computers and enhance development in Zambia.
Earlier this year Wallace & Gromit fans rushed online to buy a new series of short movie clips involving the bungling inventor and his long-suffering dog. Maker Aardman’s latest plasticine animations, called Cracking Contraptions, sold like hot cakes, writes David Shapshak in the Financial Mail and Guardian.
Meanwhile, about 600 000 subscribers pay to log on to the Wall Street Journal’s website and read its articles, analysis and opinion.
These two examples - from diametrically opposite poles of the online content spectrum, entertainment and business advice and analysis - represent a growing trend towards paying for content.
While traditional printed content, in newspapers and books, was always bought, the investor-fuelled madness of the Internet’s rise to fame saw a rush for virtual real estate.
Of the many things the Internet changed, one of the most dramatic was how information was shared. Developed as a collaborative online community for academics wishing to share their research and ideas, its essential ethos was that content, of this kind, should not only be freely available, but free.
It didn’t last long, as business discovered it was a cost-effective marketing technique. Entrepreneurs began posting "brochureware" websites, and later selling their products online.
Content producers and publishers rushed to replicate electronic versions of their publications online, giving away their content. But, on the back of the hollow online advertising market, they began to notice that the expected fortune was not materialising.
As Forrester Research puts it: "Most [media companies] online give away content that they charge for offline."
Martin Nisenenholtz, CEO of the New York Times Digital, goes even further: "We shouldn’t be talking about paid versus free any more. It’s all over. It’s the wrong debate. The right one is about focusing on profitable businesses that can actually scale in the marketplace as more consumers turn to digital in a variety of forms."
The Online Publishers Association is understandably bullish about the trend towards paid-for content.
"The year 2002 will go down as the year in which the conventional wisdom about paid online content changed. Whether or not consumers will pay for content is no longer a matter of debate. Clearly, they will. In fact, by the end of 2002, one in 10 online users in the United States was regularly paying for some form of content, and total content sales for the year reached $1,3-billion," wrote Michael Zimbalist, its executive director, in a report on online paid content in the US market released in March.
"This is the second consecutive year in which paid content revenues registered an annual growth rate of nearly 100%."
While there is an abundance of freely available information or news [daily news reports, weather and some financial information] there is also what is known as "premium" content - opinions and perspectives that are exclusively available on one site, such as the Wall Street Journal’s sought-after analysis.
One of the originators of this "premium" model is the news and magazine site Salon.com, which has been very successful with a $30-a-year fee. It has two faces: a general public face with daily news and information and a "premium" option with features, opinion pieces and more exclusive content.
Noting Salon.com’s achievements, Professor Christo Doherty, the chair of digital media at the University of the Witswatersrand, says: "In the absence of any other model, subscription is taking over."
Other examples include TheStreet.com, which also covers Wall Street, which is still free but launched RealMoney.com as a premium site ($19,95 monthly or $199,95 annually). While CNN.com and ABCnews.com have also opted for this two-tiered model using RealNetworks for their streaming.
Archives are another "premium" level that sites such as The New York Times and Time magazine, are charging for, while giving their current content away.
Another booming area is search results, although this is mostly behind what customers see and is a fee paid by the advertiser. The biggest players in this market are the two largest search portals Yahoo! and Google, and Overture, the largest seller of this paid-for online advertising, which recently bought search engine AltaVista.
Advertising is still an income generator. "Online news sites are becoming increasingly profitable, thanks to factors such as the growing availability of high-speed Net access and technology that allows ads to be imbedded in news stories," reports the Online Journalism Review. "For example, The New York Times site reported a loss of $7,5-million in 2001, but profited $8-million in 2002."
South Africa is slowly aligning itself with the global trend, although subscribers to the country’s largest Internet service provider (ISP), M-Web, have always paid for content as part of their access fees.
M-Web, like the world’s largest ISP, America Online (AOL), charges to connect its subscribers to the Internet, but also sweetens the deal with exclusive content.
M-Web recently launched a new authentication system, called "Sign Me In", which it says makes access to its sites for subscribers easier.
"We have long argued that the ‘free lunch’ model was unsustainable and that content and service toll-roads would become the norm. This is indeed what has happened.
"In the last year $1,3-billion in revenue was generated on the Web for a variety of premium services in the news and infotainment sectors, and this trend is set to increase significantly," says M-Web CEO Andrew Milne. He adds that current subscribers will not pay more for content.
Indeed, revenues from paid online content will only grow to $5,8-billion by 2006 - up from $1,4-billion in 2002, says research house Jupiter Media Metrix.
Revenues for general content will reach $2,3-billion in 2006, up from $700-million in 2001, while revenues from online games and digital music will total $1,8-billion and $1,7-billion by 2006, up from $260-million and $30-million in 2001.
"While there is money to be made in the online content business, our latest survey and market forecasts indicate that the mass market still largely shuns anything that smells like subscription online," said David Card, Jupiter vice-president.
"But in the near term, media companies will create subscription services via packaging, exclusivity and added interactive features."
According to a Jupiter consumer survey, 70% of online adults cannot understand why anyone would pay for content online - but 42% of online adults expect, over time, that people will have to pay.
Arthur Goldstuck, MD of South African research house World Wide Worx, emphasises that "there’s a misnomer in paid-for content, because you can’t sell people what they don’t want. Content is only going to be saleable when there is perceivable value in it."
"That value is usually based on how well that content is differentiated from all other content, and how much of a perceived need there is for a specific audience to have it."
The Wall Street Journal obviously has a distinct need and is "one of the biggest success stories in paid-for content in the world," he adds. Wallace & Gromit’s makers must be hoping for the same.
- Childsoldiers.org, a project of iEARN-Sierra Leone, has won a Cable and Wireless Childnet Award, which recognises the best Websites for children from all over the world.
- The Tanzanian Development Gateway has got approval for its implementation phase from the Development Gateway Foundation.
The department of communications is hoping that the process for selecting a second national operator (SNO) to be awarded the fixed-line telephone licence will go smoothly from here, with August 8 the target date for a recommendation to be made to the minister, writes Weidemann of ItWeb.
Pakamile Pongwana, deputy communications minister and chairman of the SNO working committee, which will be conducting one-to-one discussions with the various bidders, says this is not, however, a definite date. "The guideline we are working towards is to move to the next phase – making our recommendations to the Independent Communications Authority of SA (ICASA) – within a month. Then we hope that ICASA will make its recommendation for the licence by August," says Pongwana. "This is, however, not a date that can be set in stone as the process will still involve much discussion and negotiation, so the dates may yet change."
The department has announced the names of four of the five bidders for the SNO licence. The fifth consortium’s name, from China, was not made known, although it is widely believed to be spearheaded by Shanghai Telecom.
One of the other four bidders is TeleAccess Investments, a company which operates the SNO in Zimbabwe and has a major interest in the Comtel network. Comtel seeks to provide communication links between 21 African countries and will be built on a combination of optic fibre, microwave links and satellite connections that will allow for voice, data and video transmissions.
Also in the running is CommuniTel, which includes the former Goldleaf consortium that made a failed bid during the first bidding process. It now also includes Telecom Namibia, the Umkhonto We Sizwe Military Veterans Association (MKMVA), Gateway Communications (UK/South Africa) and Premier Contracts Agency (PCA) from the UK.
According to CommuniTel, it also plans to have BritishTelecom (BT) involved in the project and the consortium is looking at ways that BT can invest a significant amount of money into SA without compromising itself through taking an equity stake in the SNO.
The third bidder is Two Consortium, which is understood to include Norwegian operator Telenor. Telenor, along with fellow Scandinavian operator Telia, bid for the third cellular licence several years ago. European operator Swedtel is also thought to be involved with Two Consortium. Telia maintains a large shareholding in the Swedtel operation.
T-Systems, an ICT service provider within the Deutsche Telekom group, is the fourth bidder along with its sister company, Detecon International. Detecon has handled management contracts for several African telephony projects.
The T-Systems/Detecon International consortium is understood to be approaching the issue from a management contract perspective, rather than an outright purchase of the 51% stake on offer. This could mean that the group may form part of a merged consortium that would be recommended to ICASA.
Pongwana has already stated that the SNO working committee may possibly have to facilitate a merger between some of the bidding parties in order to get the best elements from each combined into one strong entity.
"It may be that one of the bidders has a strong financial element, while another has good business skills, for example," he says.
"We will then negotiate with them and see if it will be possible to combine them into a single new consortium that will provide SA with a strong equity owner and therefore a good SNO."
Asked what would happen if ICASA chose to reject the bid or bids that the working committee passed on to it – as happened in the first round of bidding when both the Goldleaf and Optis bids were rejected – Pongwana said they would cross that bridge when they came to it.
"We will obviously have to look at our options and analyse the issues if that should happen. We may then have to look at another route for deciding who will be awarded the SNO licence, but only if such a route is provided for by the law."
The management of Nigeria Telecommunication Limited ( NITEL) has prepared a business plan for 2003-2005 after the federal government and Pentascope International of Netherlands had signed a $45 million 3-year management contract, setting a turnover target of N128 billion in 2005, up from an estimated N54 billion in 2002.
Vanguard gathered from information made available by the Nigerian Stock Exchange (NSE) that the management of the company has anticipated a growth in operating profits before interest and taxes from an estimated N16.5 billion in 2002 to N34 .7 billion in 2005.
The targets included providing one million additional GSM customers, 600,000 new fixed lines, 95 percent call completion rate against the current 52 percent, collection of at least 95 percent of NITEL’s revenue and a minimum of two internet points of presence (POP) per annum.
The Nigerian Stock Exchange had earlier the year called on the federal government to speedy up the privatization of NITEL as many Nigerian shareholders are waiting for the 20 percent share portion of the government that have been slated to be sold on the floor of the Exchange.
Meanwhile, it was also gathered that the Bureau of Public Enterprises ( BPE) has aborted the hybrid offer by Daily Times of Nigeria (DTN). The exercise as learnt was cancelled on account of the low level of subscription put at 1.5 percent.
A further analysis of the offer shows that a total of 1.1 billion ordinary shares made up of 146.4 million shares were offered to the public between November 4 and December 12, 2002 excluding the period of extension.
At the end of the period , 3905 applications for 16.3 million shares valued at N20.3 million were received which was below the permissible minimum level of 25 percent allowed by Securities and Exchange Commission (SEC), apex regulator of the capital market.
It was gathered that the Issuing House, First Interstate Bank PLC had been directed to seek SEC’s approval so that the Registrar, First Registrar Nigeria Limited would begin to make refund to all applicants.
- Jean-René Fourtou, P-DG of Vivendi Universal has said that the company will hold on to its shareholding in Maroc Telecom as its telecoms investments were among the most solid in the group.
- Namibia Post and Telecom Holdings (NPTH) has handed over a dividend of N$7,2 million to Government, its sole shareholder, for the 2001/ 02 financial year, almost double the year before.
- Egyptian Company for Mobile Services – ECMS (EMOB. CA) posted 1Q FY03 results ending March, in which net income witnessed a robust 84% growth culminating at LE153.5 million versus LE83.4 million reported in the comparable period last year.
- Celsys Limited listed on the Zimbabwe Stock Exchange yesterday, with more than 7.7 million shares changing hands on its first day of trade at an average price of $16.05.
- Uganda Telecom clarified that the US$6.9m for the second phase of the NURP telecommunications component is a loan and not a grant. It is a ‘ON-LENT’ basis to Uganda Telecom by the Government through the NORDIC Development Fund.
* Celtel Uganda’s new owner MSI has transformed its management team. According to Johanna Korpia, its Commercial Director in an interview with Business Vision: "We have a new management team. We have a new strong managing director. I am also new. This is a decision which was made by our majority shareholder, MSI Cellular Investments in Amsterdam. They decided to give Celtel Uganda a big push and the strongest possible management team. And ever since the management team started to work, you have seen lots of things which have out".
* Oracle SA has finally appointed a local employee as its new MD to replace its UK-born head, Robin Morello, whose two-year secondment is about to end. Kelvin Reynolds will succeed him as the new MD on June 1. Reynolds has worked in the IT industry for more than 20 years, joining Oracle SA in 1999 and now working as its sales director for the public sector.
* NetAid and the United Nations Volunteers (UNV) programme have announced the names of the "Online Volunteers of the Year" for 2003. Congratulating the Online Volunteers of the Year, Sharon Capeling-Alakija, Executive Coordinator of the UNV programme said: "It is of great importance to recognize the contributions of people who make their time, skills, expertise and creativity available to others via the Internet. It is equally important to highlight that online volunteering generates many new opportunities for people to volunteer."
In Africa, Paul Fifen Chimy (Cameroon/France) assisted Education for Development (Vietnam); Deborah D’Amico (Canada) helped People with Disabilities Uganda (Uganda); Yasemin Gunay (Turkey) assisted MGBALA AGWA Youth Forum (Nigeria); and Stanley Tuvako (Kenya) helped KAIPPG (Kenya).
WIFI FOR DEVELOPING COUNTRIES CONFERENCE (26 JUNE 2003) IN NY
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